UK corp tax stays high against rest of world

Corporate tax rates across the world have continued to decline, dropping an
average 0.9% to 25.9% from last year’s 26.8 %, according toKPMG’s
Global Corporate and Indirect Tax Rate survey 2008.

Although not a single country raised its corporate tax rate in the year, for
the first time since 1994, at 28%, the UK’s corporate tax rate – despite a 2%
cut this year – remains higher than the latest global average and also against
the EU average rate which fell 1% on year-ago figures, to 23.2%.

KPMG in the UK warns the continued downward pressure on worldwide and
European corporate tax rates will add to the pressure on UK authorities to deal
with the UK’s perceived lack of corporate tax competitiveness.

‘The challenge to the UK authorities is to find a way to improve the
country’s tax competitiveness that is genuinely revenue-neutral,’ Chris Morgan,
KPMG head of international corporate tax in the UK, said. ‘The only way to find
an acceptable solution is for all parties to really engage in the debate. It’s
important that the various working groups established have a mandate to make
real proposals and are not just talking shops.’